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• Banking In Germany.
• Chapter I.: Non-issuing Credit Institutions.
• Chapter II.: German Banks of Issue.
• History of Banking In Austria-hungary.
• Chapter I.: The Austrian National Bank.
• Chapter II.: Austrian Joint-stock Banks and Banking Associations.
• Chapter III.: Hungarian Joint-stock Banks and Private Credit Institutions.
• Appendix to Banking In Germany and Austria-hungary.
• II.: Statistics of Banking In Austria-hungary.
• Banking In the Netherlands.
• Introduction.
• Chapter I.: Era of Exchange Banks.
• Chapter II.: Period From 1814. Modern Dutch Banking.
• Chapter III.: Period 1814-1863. the Netherlands Bank.
• Chapter IV.: The Netherlands Bank, 1864 to 1895.
• Chapter V.: Banks of Issue In the Dutch Colonies.
• Chapter VI.: “cashiers,” Joint-stock Banks, and Private Bankers.
• Banking In the Scandinavian Nations.
• Part I.: Banking In Denmark.
• Chapter I.: History Previous to the National Bank.
• Chapter II.: The National Bank During the First Half of the Nineteenth Century.
• Chapter III.: Private Banks.
• Part II.: Banking In Sweden.
• Part III.: Banking In Norway.
• Banking and Money In Japan.
• Part I.: The Banking System.
• Chapter I.: Common Banks.
• Chapter II.: The National Banks.
• Chapter III.: The Yokohama Specie Bank. ( Shiokinginko. )
• Chapter IV.: The Bank of Japan. ( Nippon Ginko )
• Chapter V.: Land Mortgage Banks.
• Part II.: The Currency of Japan.
• Chapter I.: The Old Coinage System.
• Chapter II.: The New Coinage Period.
• Chapter III.: The Paper Currency.
• Chapter IV.: Readjustment of the Public Debt.
• Chapter V.: The Future Money Standard.
• Appendices.
• Appendix D.: National Debt In Japan. (from the “british Economic Association Journal” of June, 1895.)
• Banking, Currency and Land Tenure In the Chinese Empire.
• I.: China’s Currencies.
• II.: Chinese Banking: Ancient and Modern.
• III.: Land Tenure and Taxation In China.

Appendix D.

National Debt in Japan.

(From the “British Economic Association Journal” of June, 1895.)

I. The Origin of the National Debt.—The sudden change from a long-established feudalism to a unified form of the State at the beginning of the Meiji era called forth many extensive and resolute political and financial schemes. Among others, the surrender, or rather the restoration to the Emperor, of their possessions by the feudal lords (Daimios) made it necessary to remunerate them for their patriotic sacrifice. Also, vassals who formerly depended upon their lords had to be supported by the State. For this purpose each Daimio and his vassals received bonds which were computed according to their former income. Previous to this drastic reform, bonds were given to those who gave up privileges and were in need of capital. The amount was computed in the case of perpetual hereditary pensions at half of six years’ pension, and in the case of life pensions at half of four years, the moiety being paid in cash in both cases. Thus the feudal pensioners became holders of the public bonds.

In addition to this, the debts of the feudal lords were converted into State liabilities, and the abolition of Riu Kiu viceroy, the confiscation of temple lands, etc., increased the burden of the State, and the amount of bonds issued rose to:

In order to get the fund with which to pay feudal lords and vassals who surrendered their pensions, and to meet other necessary expenses, the so-called Seven per cent. Sterling Loan was raised in England, in 1872, to the amount of £2,400,000 sterling, or 11,712,000 yen (£1 being the equivalent to 4.88 yen). The actual sum received was £2,220,000 sterling, the issue price being 92.5 for 100, though the subscription reached to £9,500,000. The principal of this loan was to be paid by drawings in twenty-five years, so that it will be wholly redeemed in 1897, and the interest was seven per cent., to be paid half-yearly. Though it is not now quoted highly in the London market on account of the approach of the final redemption, it stood as high as £118 12s. in 1888; and it is well known that the punctuality of the payment of both the principal and the interest of the bond gave satisfaction to its holders. So much for the increase of the debt necessitated by the abolition of the feudal system. We now pass to the debt called forth by financial necessities.

In the early days of the Restoration, the paper money issued by the Imperial Government did not obtain popular confidence, and was at a discount for a long time. Consequently, in 1869 the maximum amount of issue was fixed at 32,500,000 yen, and a decree was promulgated to convert the paper notes into the new coins by 1871, and the amount not converted was to bear six per cent. interest. But the Government was unable to carry out the promise of redemption when the time matured, on account of the increase of expenditure, the difficulty of finding out the possessors, etc. Hence, in 1871, it was enacted that the owner of paper (notes) could have it converted into six per cent interest bonds if he liked. But the bond thus given in exchange was registered, and its negotiation was inconvenient. By an act issued in 1883, the bonds were changed into unregistered bonds to the amount of 7,929,900 yen. This scheme, as well as the retrenchment in the expenditure, was effective, and the value of paper notes gradually restored till it stood at par with silver.

Then we come to debts raised for economical improvement. Among others, we must count the Nine per cent. Sterling Loan, the first loan raised abroad for the purpose of developing the national resources by facilitating the means of communication. This was raised in London, in 1869, through the hand of the Oriental Bank Corporation, to the amount of £1,000,000, or 4,800,000 yen (£1=4.88 yen), at nine per cent. interest, it being already redeemed in 1882. With the proceeds of this loan the first railway—viz., the Tokio and Yokohama line—was constructed.

After this, various loans were raised for the improvement of the means of transportation, especially for the construction of railways, the amount being:

We must not forget to mention the debt incurred during the civil war of 1877, to the amount of 15,000,000 yen at five per cent. (now 100,000,000 at seven and one-half per cent.), from the Fifteenth National Bank; the Navy Loan, issued to the amount of 17,000,000 yen, for the purpose of strengthening the naval force, and the 22,000,000 yen non-interest-bearing fund for the conversion of paper money into silver, borrowed from the Nippon Ginko, or the Bank of Japan. Besides, there are the Consolidation Loan and the new War Loan. But these will be described in separate sections.

Although there are floating debts in the form of Treasury bills issued in each fiscal year to meet temporary necessities, these are to be redeemed within the year of issue, and the total amount is fixed in the budget. Hence, they do not occupy an important space in the stock exchange.

Thus it is evident that most of the loans were raised either by urgent political and financial necessity, or for productive purposes; hence, the Japanese debt, unlike so many others, was not raised in order to delay the financial embarrassment caused by continual deficit.

II. The Consolidation Loan.—The debts hitherto mentioned differed not only in the management and redemption, but in the rate of interest. Moreover, by the development of credit organizations and the general economy, the rate of interest began to fall, and the rate, which oscillated between twelve and eight per cent. before, descended to seven per cent. in 1886. At the same time, the price of bonds gradually rose; for instance, six per cent hereditary bonds, which stood at 64.753 yen in 1881, rose to 105.181 yen in 1886. Hence, the time became ripe for the conversion of the debt, and in 1886 the celebrated drastic law called the Consolidation of the Public Loan Act was issued, to convert all debts above six per cent. interest, and to consolidate the various loans issued under different regulations. The main features of this act are:

1. The total amount of the issue to be limited to 175,000,000 yen.

2. The rate of interest of the loan to be five per cent. per annum, payable half-yearly, in June and December.

3. The bonds issued to be unregistered, bearing coupons, but convertible into registered bonds at the option of holders.

4. The bonds to be of five denominations; namely, 5000 yen, 1000 yen, 500 yen, 100 yen, and 50 yen.

5. The principal to be redeemed by lot within fifty years, counting from the sixth year after the issue.

6. Drawing for redemption to take place at the Nippon Ginko, the amount of the bonds so drawn being advertised in the official gazette.

7. The payment of the principal or interest not to be allowed after the lapse of full fifteen or five years respectively from the month of payment.

8. Application for the issue of new bond or coupon to be made to the Nippon Ginko, its branch offices, or agencies, when it is lost, defaced, destroyed, or mutilated.

9. Application signed by both transferor and transferee to be made to the Nippon Ginko, its branch offices or agencies, when registered bond is sold or otherwise transferred, etc.

The amounts actually issued of this loan were:

In this way, various debts above six per cent. interest were converted to the amount of 166,482,450 yen; and the kinds of debt still remaining are nine, as shown below:

III. The New War Loan.—The outbreak of the war with China forced upon the country an enormous expenditure. This is inevitable when a country is engaged in an extensive war beyond its border, and especially across the sea. In order to meet the necessity, the new War Loan was raised to the amount of 150,000,000 yen at five per cent in 1894, and to this 100,000,000 more were added in 1895. The first loan was called twice—viz., in August and December of 1894, respectively.

The first call was for 30,000,000, and the minimum price of subscription was fixed at par. But the subscribed amount reached 77,002,650 yen, or 47,002,650 yen above the sum needed, and of this 11,627,850 were above par, and some were as high as 142.44 for 100 yen. At the second call the amount was 50,000,000 and the minimum price was 95 for 100 yen. This unfavorable condition of issue was necessitated by the state of the money market, which is usually strained at the close of every year. But the subscription exceeded by the enormous sum of 40,274,750 yen, and some ranged as high as 120 yen. It is to be observed that among the subscribers were foreigners residing in Tokio and Yokohama. If the war continues, the Government can still issue 170,000,000 yen, and the nation is ready to meet the call. Although there are rumors founded on expectations that at least a part of the remainder may be borrowed abroad, the desire of the people at large rather inclines to the internal loan. The reasons alleged on their side are that the financial strength of the country is more than we expected; that the state of the money market is not strained, as it was predicted; that there are money returns from the seat of war and from the purchase of goods at home; and, lastly, that we must fight not only with our soldiers, but with our money. But the strongest reason is that if we borrow in gold from gold-standard countries, which seems the natural course, the probability of future losses through the fall of silver deters us from offering a higher rate than three per cent., at which it may perhaps be difficult to find a lender.

IV. Summary.—From what has been stated, the condition of the credit of our country must appear satisfactory even to a staunch pessimist. Especially when we survey the result of the war, the War Loan, which is quite a new-born child, can be safely made the object of investment not only for our countrymen, but for the foreign capitalist, especially as it is now quoted very low in the stock exchange. But if this loan is not acceptable on account of its being not yet fully paid up, the Consolidated Loan is the best way of investing the foreign capital. In this way the superfluous capital in Europe and America can get a comparatively high rate of interest, and our country can reap the benefit thereby without undergoing the troublesome task of issuing a foreign loan and being opposed by the patriotic cry: “Why not let us fight with our own money!”

According to the budget estimate for the financial year 1895-96, the total amount of national debt raised by the Imperial Government during the interval between 1872 and May of 1894, rises to 502,371,900 yen. But 237,599,224 yen of the debt were redeemed till the latter period, and thus we get the sum of 264,772,676 yen. To this we must add 80,000,000 yen of the new War Loan, and deduct from it 219,844.50 yen of old debt redeemed in December, 1894; hence, the existing national debt stands at 344,453,221.50 yen, a burden not too heavy for a country like Japan. In the same budget the sum to be paid out as the capital and interest of the national debt is estimated at 24,344,575.438 yen, and this, compared with the total revenue of 90,300,709.453 yen, is only 26.95 per cent. of the latter. When we consider that there are countries which pay more than half of their revenue as the interest of their debt, while only 16,016,683.026 yen, that is to say, only 17.73 per cent. of the revenue, is paid as the interest by Japan, the discrepancy becomes wider, and the fact that the credit of the latter country has been hitherto too lowly estimated by the world at large becomes more evident.

Banking, Currency and

Land Tenure

in

THE CHINESE EMPIRE.

AN ESSAY

by

Hon. THOMAS R. JERNIGAN,

united states consul-general at shanghai.

new york.

1896.

BANKING, CURRENCY AND LAND TENURE IN THE CHINESE EMPIRE.

I.

CHINA’S CURRENCIES.

FROM 524 bc TO PRESENT TIMES.

SOME time ago I attended a session of the Mixed Court at Shanghai, China, and observing that the Chinese judge was asking questions of and receiving answers from the witness through an interpreter of his own nationality, I inquired if such was the usual form of conducting examinations in the courts of China. I was somewhat surprised to receive the answer that the witness resided in another province, and that the presiding judge was not familiar with the dialect of the province; and thus it is with the currency of China, the variations and peculiarities of which are as numerous as the dialects spoken in the different provinces. The difficulty, therefore, of writing logically of the currency of China will readily occur to the reader; and if the subject can be made intelligible by a general review, more should not, at present, be expected.

“CASH” MONEY.

The coin which is more national in character than any other in use by the Chinese, is called cash. It is thin and circular, rather more than an inch in diameter, with a square hole in the middle, for the convenience of stringing, and should consist of equal parts of copper and zinc, and each piece should weigh fifty-eight grains troy; but their only national coin has been so debased and reduced in size, within the last fifty years, that most of it now in circulation will not weigh more than thirty grains. The cash well illustrates the size of commercial transactions among Chinese, as its fluctuating value in the provinces shows the unreliability as to the value of all transactions. About one thousand cash should be required in exchange for a dollar; but in some provinces as many as eighteen hundred are required; and often in the same province the value is so uncertain that it is not known one day what the purchasing power of a cash will be another; and to add to such apparent business perplexity, debasement has been so energetically and skillfully practised, as to invest the genuineness of the coin with so great suspicion, that purchasers in the markets have to supply themselves with genuine and debased cash to facilitate purchases, as there are articles which the genuine cash only will buy, and others which are sold for the debased.

The antiquity of the use of cash is established by authentic proof. Chinese writers discuss, with every assurance of accuracy, events happening several thousand years ago; and, while in no country in the world does age receive greater reverence than in China, there is a national sentiment which places so little value on the importance of time, as an element of consideration in the affairs of life, that native historians may not always have fully appreciated the studious research demanded by modern scholars as a first qualification to write authentically of remote events. From the collections of numismatists, there appears to have been in existence, as early as bc 524, a Chinese coin, with a square hole in the middle, similar to that seen in the cash now in daily use; while another account credits the origination of round cash to a Chief Minister of the Han dynasty, in the twelfth century, before our era. But however the issue may be decided as to the precise time when cash was first used as a coin, the date is sufficiently remote to prove that copper has existed as a purchasing power, and that it has maintained such, in more or less degree, for centuries in China.

This small copper coin, the tenth part in value of a cent, is the chief aim of acquisition by the Chinese laborer, for it supplies his wants and satisfies his aspirations. The use of such small denominational currency indicates wants which, to the laborers of the Occident, must appear easy to satisfy; but the returns of labor in the Orient demand the industry of a day, as in the other parts of the world, and the Chinese laborer must bestir himself from early dawn until evening to win the requisite number of cash to supply his necessities. Amid changing dynasties, this coin has remained unchanged in the performance of its monetary functions, and the merchants of China trade on as small margins to-day as they did at the date of the earliest records of commercial transactions in China.

PAPER CURRENCY.

The introduction of paper currency into China appears to have been due to the use of seals, and is very closely connected with the history of printing. When it became the custom of certain Chinese officials to give a money value to certain articles by impressing their seals upon them, the idea of paper money was naturally suggested. Seals were borrowed from Western Asia, and the Chinese having made them, and cut upon them their own writing, they were used in giving validity to official documents as well as a manifest proof of their genuineness. Their use was extended by subsequent legislation by giving one to every officer, and the grade of the official was indicated by the metal from which the seal was made—those made of silver being given to officers of the first and second rank, and the copper seals of the Taotais being a continuation of the old rule which has come down from 221 bc The seal may also be accepted as marking the visible sign of the change from feudalism to centralization; the official who carried it admitted his representative capacity and acknowledged the Imperial head of the State from whom he received it.

The most reliable date of the introduction of paper into China is stated to be about ad 200, but seven centuries passed before books were printed, and as many as eight before paper currency was systematically adopted by the Chinese Government. The long interval between the introduction of paper and the adoption of a paper currency is attributed to the habit of the workmen of first cutting into the material of the seal instead of cutting the inscription in relief; but when the thought occurred that relief cutting would leave a white ground, with a red or black inscription, the invention of blank forms and the printing of books followed.

“FLYING MONEY.”

ad 806 is the most reliable date of the first appearance of paper currency, and it was then that bills of exchange were called “flying money.” By an Imperial ordinance, then first made, merchants in the capital could receive Government bills in return for copper money, and at any of the provincial capitals the provincial treasurer could pay the amount stated upon the bill. This system of banking was a facility offered to merchants by the Government, and was again in operation about the year ad 960, a bureau being instituted at the capital for the transaction of the business. And in ad 1023, when copper became so scarce in the province of Szechuen that an attempt was made by the Government to relieve the wants of the situation by the introduction of iron cash coinage, the failure was so seriously felt that paper notes were again put in circulation at Chengtu, it being stipulated that such notes were to be returned every three years, an idea which originated with the wealthy merchants, and being accepted by the Government, the merchants were left to conduct the business. When the Golden Tartars conquered North China in ad 1150, they adopted a paper currency, because of the scarcity of copper, and during the succeeding century of their reign, as during the century following of Mongol domination, the most strenuous efforts were made to maintain a paper medium.

The following details of the progress of paper money are given by Martin, in his history of China: In the year 119 bc, paper money was used by the Chinese; sometimes a nominal currency was issued on pieces of skin a foot square, or on pasteboard; in the Tang dynasty, ad 807, the currency was more regular and copper only used for coining. Contributions were obliged to be made to the treasury, for which “the Sian,” voluntary money, was issued; ad 960, notes were issued for merchandise deposited in the public treasuries like pawnbrokers’ duplicates; they were called “Pien ch’ien,” or accommodation money, were everywhere negotiable, made on paper a foot square, with their current value stamped on them, and had an official seal. Subsequently, a system of cheques was issued to replace the heavy iron coinage used. About the tenth century, a better system of banking was introduced; bills of exchange were issued, payable every three years. About the twelfth century, the public creditors were paid by the issue of notes, or contracts in nominal value, ranging from 200 to 1000 cash. The extent to which these were issued toward the close of the century is stated to have been 28,000,000 ounces of silver. Different provinces, also, issued their own paper, and a great monetary confusion arose.

PAPER MONEY IN THE THIRTEENTH CENTURY.

Marco Polo, the Venetian traveler, who resided in China for upward of twenty years, about the year ad 1256 thus describes the mode in which paper money was then made and issued by the Emperor, or Grand Khan, in the city of Peking. The bark is stripped from a tree (the mulberry), on the leaves of which the silk-worm feeds. It is first well soaked in water, then pounded in a mortar into a pulpy consistency, and then made into paper of a dark color, which is cut into oblongs of different sizes and values. These notes are signed by special officers, and stamped with the Emperor’s seal, which attaches value to it. The penalty for forgery is death. This money is circulated throughout the empire, and any article can be procured by those who have this money. When these notes are damaged from use, they are exchanged at the mint for new ones, at the charge of three per cent.; the holders could obtain gold or silver for them anytime, by applying at the mint, provided the metal was intended to be manufactured into ornaments, drinking cups, etc. The armies of the Emperor were paid with this currency. One of the Government notes extant during the Ming dynasty has the following on one half of it: “At the petition of the treasury board, it is ordained that paper money thus marked with the Imperial seal of the Ming shall have currency and be used in all respects as if it were copper money; whosoever disobeys will have his head cut off.”

ABOLITION OF PAPER FOR SILVER.

When the Mongols were driven from power, says Klaproth, they had ruined China by their paper money; and notwithstanding the effort of the Ming dynasty to revive paper currency by recalling the old and issuing new notes for 100 to 1000 cash, and trying to keep up their value by forbidding traffic in gold or silver, the value of the notes declined in 1448 to three cash of copper to 1000 cash paper. And in ad 1455, although the Government decreed the taxes to be paid in paper money, forbidding the use of metal money, the nominal Government currency gradually declined and was finally abandoned, as the products of the Mexican and Peruvian silver mines flowed into the ports of Southern China through the agency of foreign trade. Notes were finally abolished about ad 1620, the conquest of silver over paper having occupied about a century. But silver had been used in China as money long before the introduction of American silver, though the importation of American silver was found the unfailing stream through which the ruling currency of China was kept in circulation; and the discovery of the silver mines in America is the cause of the dominance of silver in China as the currency in all large transactions. Eighty years after the discovery of America and sixty-one years after the Pacific Ocean was first seen by Bilboa from the mountain-tops of Nicaragua, the import of silver had been so large that seven or eight ounces had the value of one ounce of gold.

In a work by Wang-liu, published in 1831, the point is made that silver was not employed as money before the Tang dynasty, ad 618, and that it was then introduced. In another work, called “Si-chien,” by Ku-Yen-Wu, who died two centuries ago, it is stated that, before the Tang dynasty, copper cash was the medium of exchange between the Government and people, and silver had never come into use; but other authorities maintain that at that time silver was already introduced in South China, meaning by that term Canton and Kuangsi.

THE THREE BELTS OF CIRCULATION.

The exposition of Chinese history by Ku-Yen-Wu shows that there were, in regard to money circulation, three belts of country; that in the extreme south, gold and silver were in use, Canton being the centre of trade; in middle China, all along the Yang-tse into Szechuen, copper cash were used everywhere as the medium of exchange—the first and second belt being ruled from Nanking as the centre; and in the north, which was under Tartar administration, copper coin and grain were employed as a double medium of exchange. From this account of the circulation of silver, it appears that it began to be a currency in South China first, and at a time when China sent her prefects regularly to rule in Cochin-Chinese and Cambodian cities; and the silver, which circulated by weight in Canton in ad 500, would be partly Burmese, as it was then abundantly produced in Burmah, and partly what Arabian merchants and others brought from distant ports; for Arabian merchants probably shared the commerce of the southern provinces of China, as there are many proofs of the activity of Arab merchants from the Han dynasty downward. So much for remote history.

CURRENCY OF THE PRESENT.

But the date of the introduction of silver into China and the capacity of the silver mines of China are not of so much practical interest to the business man as a knowledge of the silver currency now in use. It is doubtful if the traveler or merchant can now visit any province of China where he will not find in circulation the Mexican dollar, which seems to supply a great desideratum of the Chinese merchant, and passes current throughout the empire. The tael is the money of account and the base of all monetary transactions in China. It is supposed to be a certain weight of silver, called sycee silver, and in shape resembles the shoe of a Chinese woman. The tael is not issued by the Government; it is in no way vouched for or guaranteed by any legal authority; and yet it is the standard of value in all money transactions, while in appearance only a rough ingot of silver, with variable weight and fineness, and having no fixed standard. To add to the confusion of such a money—circulated without authority, stamped by no government, varying in weight in different parts of China—not only is there a difference in the value, but often more than one kind of tael is used at the same port. It would be perplexing to attempt any minute account of all these current taels; and as Shanghai is the largest treaty port in China, it would probably be more intelligent to give a general explanation of the tael currency as it is found in Shanghai, an interesting paper on which has been written by James K. Morrison.

There is at Shanghai what is called a Shanghai tael weight and a Shanghai tael currency, the latter having no existence as a coin, and yet being the money of account; and, as stated, being “only a certain weight of silver called sycee silver, of a variable fineness within certain limits, but adjusted by the addition of a premium or betterness to a fancied standard, and the product dealt with or worked out in an arbitrary manner ruled by custom. The standard is called fancied, because it cannot be found to be clearly laid down by the Chinese what the standard of fineness is on which they work.”

SYCEE SILVER.

A word as to what is meant by sycee silver may be of intelligent interest. The word sycee is called by the Chinese “wan yin,” meaning pure silver; and sycee, as used in Shanghai, is cast into ingots, or shoes, weighing about fifty Shanghai or Chauping taels weight. In some parts of China, ingots of lesser weights may be seen, but this is seldom. In making sycee, which is usually done at Shanghai by melting down silver bars imported from Europe and America, the melters impress on each shoe their “chop,” or name, and one or two characters giving reference to the record of the date of casting, the weight and premium. When the “shoes” are cast, they are inspected by an official called the “kung koo,” not appointed by the Government, but selected by the Chinese bankers and money-changers and paid a small fee of so many cash on each shoe he inspects; and when satisfied, the kung koo writes on each shoe in black ink in large Chinese characters its weight and the premium it bears, and then the shoes of sycee are ready for circulation. In order to guard more effectively against fraud, not only are the melter and inspector individually responsible, but deadly penalties are enforced against their heirs for all time.

Mr. Morrison gives an example of the method used for arriving at the value of the sycee in Shanghai currency as follows:

1. The weight of the sycee is taken in Chauping taels.

2. To this is added the premium or betterness that the sycee bears, and which is marked by the kung koo on each shoe.

3. The combined sum of weight and premium is then divided by 98, and the result is taels Shanghai currency.

The calculation in figures is given as follows:

The premium represents the fineness of sycee and ranges from four to six per cent., or from two to three taels on each shoe of about fifty taels weight. Different reasons are given for the two per cent. mentioned under No. 3 or the dividing by .98. One is that it is an old custom; another that it represents the kung koo’s fees and melter’s profits; while a third is that it did not originally exist, but is the arbitrary act of an impecunious viceroy who desired to fill his exhausted treasury. However, the two per cent. in no way affects the value of the Shanghai currency.

THE STANDARD OF SYCEE.

The necessity of having a standard of fineness, as well as a working standard, is apparent, particularly as the premium added to the weight of the silver varies; and yet it is difficult to ascertain from the Chinese, with their characteristic disregard for accuracy in such matters, what the standard of sycee is. Some place the standard of sycee of six per cent. at six per cent. under 1000 (pure silver); others say it is 998, and still others fix the standard at 916.66. The shipment of sycee to the Indian mints, extending over a long term of years, has made it possible to ascertain, with reasonable accuracy, the proportion of pure silver in 1000 taels of Shanghai sycee. While particular shipments varied as much as from one-half of one per cent. below to one-half of one per cent. above the usual standard, it was found that 916.66 Chauping taels weight of pure silver was the average output of 1000 taels of Shanghai currency. This (916.66) is the standard accepted by foreign bankers in China for the Shanghai tael currency. That is, if the Shanghai tael existed as a coin it would contain 916.66 parts of pure silver in 1000 parts. There is a difficulty, however, in accepting 916.66 as the standard on which the Chinese work their system of premiums. It is necessary to eliminate the two per cent. “custom,” which makes the working standard on which the Chinese calculate the premium to be 935.37. Working on this standard, and assuming the highest premium sycee can bear to be six per cent., we arrive at a maximum fineness for Shanghai sycee of 991.50. This is nearly one per cent. short of being pure silver, but it is above the average fineness of sycee as now met with. To bring it up to pure silver 1000 touch, it will require a premium of about 6.91 per cent. on the standard named. The original standard of sycee, which must have been founded on the difference between a standard and pure silver, was probably 943.396. Although this standard is much higher than the present working standard, it is believed to be the one on which the currency system of Shanghai was originally founded. Assuming that this is substantially correct, it shows that “sycee, like everything else connected with coinage in China, has deteriorated very considerably.” If the two per cent. referred to above did not originally exist, but was brought into force when the standard was 943.396, it would reduce the value of the tael to 924.528. Or, it is not at all improbable that “various squeezes” gradually brought the standard down to 935.374; and finally the two per cent. reduction was made, further reducing the intrinsic worth of the currency tael to 916.66, as it is at present, but leaving the system of premium to be calculated on the previous quality of 935.374. However this may be, the present Shanghai currency tael contains 916.666 parts of pure silver in 1000 parts; or, in other words, 1000 taels of Shanghai sycee ought to contain on an average 916.666 Chauping taels of pure silver. The assays in India practically confirm this standard. The actual weight of sycee required to equal a Shanghai tael varies according to the premium the sycee bears; but actual weighing and experience fix the ratio at 930 Chauping taels to 1000 taels Shanghai currency. If a Shanghai tael coin were to be issued, based exactly on the present tael currency, it would weigh 565.697 grains troy, of which 916.666 parts would be pure silver and 83.334 parts alloy.

THE STATUS OF GOLD IN CHINA.

From the earliest dawn of civilization, gold has retained its preëminence among the precious metals. A Chinese author of the second century writes that gold early attracted attention because of its weight and beauty, and gives the following reasons why it has retained superior value and been held in higher esteem than other metals: It does not tarnish with time; it does not become lighter when melted, even if it goes into the crucible a hundred times; and it yields without manipulation to the artificer. Writing on the subject a century later, Pliny substantially affirms this account of the superior estimate placed upon gold, and says that the superiority of gold is in its losing no weight when in the melting-pot, or in a funeral pyre on the occasion of a cremation; even when drawn into wire the hands are not soiled by it, as is the case when silver, copper, or lead is handled. It is also capable of being spread out into a thinner leaf than any other metal, and is divisible into a greater number of parts, and there is no other metal which can vie with gold in the facility with which it can be spun and woven like wool, so as to take the place among materials which compose textile fabrics. It is related that some of the Roman kings wore golden tunics when they triumphed; and Pliny records that he saw, at a naval sham-fight, at which the Emperor Claudius was present, the Empress Agrippina seated beside him, who wore a robe woven entirely of gold thread.

From the ancient records it can be learned that gold was abundant in Europe and Asia at the earliest date of authentic history. In Europe it was found in the Tagus, the Po, the Hebrus, and in Thrace, during the time of the Roman Empire; while, in Asia, it was found in the Pactolus, in Asia Minor. The Ganges was famed for its gold. The Persian Monarchy was enabled to use gold for coin because of the quantities brought from the Ural and Altai mountains, and the rivers which flowed from them; and in Spain, mountains otherwise unproductive, were found to produce gold. In China, the chief places mentioned as producing this metal are Yunnan and Szechuan, Kiangsi, Canton, Kuangsi, and Fukien.

The Chinese collect gold in the sands of rivers, melt rocky masses, persevering until they separate the metal from its stony envelope. Formerly, the Chinese treated the ore in a furnace, but there is no account, until recently, of their using powder to break up rocks, for which both dynamite and powder are now used. The gold mines of China, however, have never been worked according to any system now recognized as effective. The gold which has been extracted has been hoarded or sold to goldsmiths, and its use in buying and selling has been in the form of uncoined metal, sold by weight; its important stability of value having caused it to be everywhere acceptable in payment for commodities.

Translations from the “Peking Gazette” show that the rich families of Peking are parting with their hoards of gold because of the large price it commands in silver; and as the property-holders of China count their treasures in taels of silver, the satisfaction of seeing their wealth apparently increased so rapidly, is a temptation they find it difficult to resist. It is related that, in Chinese life, it is quite common for rich families to become poor, and that in such cases gold ornaments will be exchanged for silver, thus proving that the ambition to count wealth by numbers, without a proper regard for real value, has added to the quantity of gold in the markets of China, and increased the amount exported to foreign countries. As China is a silver-using country, and as there has been no rise in the average prices of native commodities simultaneously with the fall in the value of silver, these facts have naturally stimulated the desire of the Chinese to exchange their gold for silver, thus doubling the purchasing power of their means in the markets of their country. The demands of the gold-using countries have also been felt in the money markets of China, opening wider the door for the exportation of gold, infusing life and activity into the markets, and adding to the advantages in exchange in favor of the resident Chinaman who owned gold and who lived on the native products of China. With such forces at work in business, the purchasing power of gold continued to appreciate, and although the value of silver as compared with gold depreciated, yet, as stated, the purchasing power of silver remained virtually unchanged. In 1866, the price of gold bars of a fixed weight and fineness was 164.50 taels per bar; on July 3d, 1894, the price was 341.50 taels per bar, or an advance in taels of 177, or 107 per cent. In July, 1894, a bar of gold would buy 341.50 taels of silver, against 164.50 taels in 1866; and, as 100 taels of silver will buy as much now as then in the way of commodities, it follows that a gold bar will buy 107 per cent. more of commodities. From the above facts, which have been compiled from a trustworthy source, it is clear that legislation with reference to gold and silver has apparently brought no disadvantage to the laborer in the silver-using country; but this conclusion, in order to be sound, must be supported by another fact—that the wages of labor have proportionately increased in the silver-using countries, which is not the case with China. The Chinaman who has a hundred dollars in gold may buy two hundred Mexican dollars; but the Chinaman who has no gold, and must work to secure enough silver to purchase the necessities of life for himself and family, receives almost the same price in silver for his labor as he did when a hundred dollars in gold would not buy more than one hundred and twenty-five Mexican dollars. These two facts go together in considering the benefits and evils resulting from the monetary changes, as such changes affect the labor and commerce of the world.

II.

CHINESE BANKING:

ANCIENT AND MODERN.

THE ABSENCE OF GOVERNMENT REGULATION.

FROM what has been written with reference to the money current in China, the conclusion is clear that its value, as a means of purchase or exchange, is what custom has given to it; changed from time to time and made different in the different provinces by the decisions and acts of the merchants. There is probably no government in the world that has so little to do with the money circulating within its borders, or which may properly be the subject of legislation, as the Government of China; but this non-use of a most important prerogative of sovereignty will not appear so surprising when it is considered that China is also about the only nation in the world without a public treasury. The Central Government is supported by contributions, as it were, from the different provinces; and even the foreign representatives of China are not paid from Peking, certain provinces being required to contribute to the support of certain legations of the Government.

This irregular system, apparently without chart, and from which the influence of the Central Government seems eliminated, exists equally in connection with the banking system of China. It would seem that if a law were necessary for any purpose whatever potential in the regulation of business affairs, it would be essential to define the functions and responsibilities of the institutions used to facilitate commerce and trade, and which are often constituted the great trustees of public wealth. A warrant or charter for a bank, by the Government of China, would, says Williams, in his “Middle Kingdom,” carry no weight with it, and banking corporations are unknown. There is a requirement, due more to the custom among merchants than to any special act of the Government, that a bank can be opened by any person or company by making certain payments to the Government; and while this requirement is sometimes called a law, it does not deserve the name, although the decisions of the merchant class of Chinese are received by Chinese business men as having the authority and binding force of laws. This fact evidences the confidence reposed in the banks, and illustrates how the community of interest establishes a necessity for mutual confidence, and how that confidence encourages the inviolable observance of all banking functions. The Chinese bankers are thoroughly impressed that honesty is the best policy; that principle is rigorously enforced, and when violated, the consequences are always serious. As the fundamental principle of the Government of China is parental, offences committed by one member of a family must be atoned for by the relations of the offender; which provides another safeguard against failures and defalcations by banks and bankers.

METHODS OF BANKING.

The trade of China is carried on mostly through banks. As already indicated, they are private institutions, and are conducted upon about the same general principles as prevail in other countries. They are composed of one or more individuals, with equal or unequal shares, and sometimes using only one name, although there may be several partners. The banks receive money on deposit at one rate of interest, and, when lending, charge a higher rate. They will discount their own bills, and often share profits on the transactions undertaken by the borrower. When deposits are made, drawable at the option of the depositor, interest is allowed to the depositor; though, in order to withdraw the deposit, or any part of it, the depositor must duly notify the bank of such intention. When the deposit is made, a receipt is given by the bank, in which the terms of the deposit are stated. When a pass-book is given, which is more satisfactory and is often done, it must be sent to the bank and the transactions are entered in it, either to the debit of the depositor or credit of the bank. The pass-book needs to be carefully kept; for, if lost, there is much difficulty in recovering the money which has not been drawn. A note or receipt given for the money loaned at compound interest would be illegal; but interest may be added to the principal, and a new note, or receipt, given for the amount thus made, which is held to be a new principal upon which interest may be charged; and this may be done monthly, annually, or at any other period, according to agreement. The rate of interest, regulated by custom or law, is about three per cent. per month, or thirty-six per cent. per annum; and whatever sum may be due as interest at the date of repayment, no more can be received or demanded than the original sum lent and the lawful interest thereon, to any amount not exceeding the principal; a proviso of the law which makes the prompt collection of interest a necessary precaution against loss.

CORPOREAL PUNISHMENT FOR DEFAULT.

When a debtor fails to fulfill his agreement, he is punished by blows with the bamboo, the number being regulated according to the amount of the debt, and the blows are repeated from month to month, until the agreement is fulfilled. Sometimes, in lieu of blows, imprisonment is the punishment for this species of delinquency. The repetition of the punishment, from time to time, would seem exceedingly cruel; but to the Chinese, who know of no modification of the family law, out of which grows the mutual responsibility of relatives, it is regarded as a legitimate means of enforcing payment by the debtor or some of his relations.

BILLS OF EXCHANGE.

Bills of exchange and promissory notes circulate from hand to hand, and are either payable at sight or within a given period after sight, in which (latter) case they are regularly “accepted”; sometimes they are made payable at fixed periods. There is a certain sort of promissory note in circulation which does not pass through the hands of more than three or four successive persons, generally all of whom are well acquainted with each other. The peculiarity of this form of note is that the original is not indorsed in the manner customary in the United States, but, instead, a piece of paper is attached to it, on which is written the reason why the note is handed over to another person in the place of money. At the maturity of this note, another peculiarity is that the holder does not apply for payment to the drawer, but to the holder from whom he received it, and thus it passes on to each indorser until it reaches the drawer; or the three or four persons whose names are on the indorsement, including the actual holder of the bill, call together on the drawee for payment, this mode being considered the most simple and effectual. It will be seen that promissory notes of the sort described are not so much notes of accommodation as security for the payment of money; and the discount on them varies according to the scarcity of money or credit, but seldom exceeds more than one per cent. per month. The usual medium of transmitting money is through letter of credit or bills of exchange, and the cost of remittance is measured by the distance to those places with which the bank issuing the letter of credit or bill of exchange stands in relations of business. The business of many of the banks is confined to their own and adjoining provinces, and the connections of only a few extend beyond those limits. But whenever there are connections between banks, the intercourse is maintained with the greatest regularity.

THE BANKS AND THE GOVERNMENT.

So much opposed are the banks of China to any connection with the Government, that the employees are exempt from all such responsibility. There is an exception to this rule in the case of the Government shroff; but it is not so much an exception as a custom of every public officer superintending any branch of the revenue to employ a shroff to receive the taxes and duties. There is a bank, however, in each province, to which is confided the keeping of the treasure of the local government and the collection of the taxes, on which a commission of two per cent. is paid such banks. But the banks which are considered the most important are those of discount and deposit. These enjoy the greater degree of public confidence, and are most encouraged by the Government. The chief of these banks are those of deposit; the operations of which comprise discount, negotiations of letters of exchange, advances on movable and immovable property, on merchandise, and the exchanging of the precious metals. The number of such banks it is difficult to determine; but the Government encourages their augmentation.

One of the great resources of a Chinese bank is the negotiation of letters of exchange of long date, sometimes for several years. But long terms are not so frequent since the establishment of foreign banks at the treaty ports, as such letters are not acceptable in foreign commerce.

The deposit banks, generally, have but small capital. Their business is confined to allowing interest on the daily balances of the deposits, but they engage vis à vis with their clients, and to them give all the possible facilities, or they may make their clients advances. The practice is, in effect, that a client having a deposit, may obtain on it, on occasions, nearly double the sum he has deposited, and give only a simple personal guarantee under his own signature. But this form of loan is not of long date, being mostly from five to ten days, and at the rate of interest for the day.

BANKERS’ CLEARINGS.

One of the operations—the most remarkable, perhaps—of the Chinese banks, is their system of clearings, which may be compared, in excellence, to the system prevailing at the clearing-houses of London, New York, and other great commercial cities. Each depositor receives from his bank a book of double column, in one of which are written to his credit all the sums that he deposits, and in the other all the transactions that follow; the depositor sends to the bank all the creditors for their payments, on the understanding that he, each evening before closing his business, sends his bookkeeper with the book in question, indicating what dispositions he has made. The next morning, the bookkeepers of several banks meet, indicate in their books the sums to be paid or to be received for their clients, and settle their balances with cash or by other means. This system of clearing is not without difficulty, not only as between bankers and negotiants, but also as between employers and workmen. The method presents advantages in the economy of time and in putting the daily savings of commerce in circulation. Yet, when currency becomes scarce, the bankers of China, as elsewhere, seek not only to recover again the advances made to their clients, but also to draw from their confrères the balances which may be due to them. It is then that the custom of the Chinese banks offers, perhaps, an advantage over foreign banks; they give an average of ten to fifteen days for the payment of these cash balances; the delay becomes palliative and the crisis is moderated, or public opinion becomes reassured, for the banks have time to procure the needed relief from the banks of a neighboring province. A money crisis in China, however, is rare, and when one occurs, it is quickly over. At the appearance of financial trouble in a province, the Governor is authorized to aid the bank with such sums collected from taxes as may be at his disposal; and, as the crisis generally happens at the end of the Chinese year, the taxes are invariably retained till that period.

PAWNBROKERS AS BANKERS.

Pawnbrokers form such a numerous class, and are so intimately connected with business, that no account of banking in China would be complete without some account of pawnshops. The trade of lending money on pledge is, doubtless, more universally practised in China than in any other country in the world. It has been systematized in accordance with rules defined with undeviating precision, and which permeate the entire business life of the Chinese companies. It is regularly organized by virtue of license issued by the Government, and for which certain taxes are annually paid. Classifications, according to grade, are made, which are regulated by the difference in the amounts paid as license tax, as well as by the shape and size of the buildings in which the business is conducted, and such buildings are the most imposing in a Chinese city. All kinds of merchandise may be accepted on pledge, the borrower paying a certain rate of interest and submitting to established rules, which are unconditionally enforced. The usual rate of interest is thirty-six per cent. per annum; but, in the interest of the poor, the rate is reduced to two per cent. per annum during the winter months. Should the pledge remain unredeemed for three years, it is disposed of by public sale; and, under certain circumstances, it may be sold within a shorter period—the months for sale being the 2d, 5th, 8th, 9th, and 11th of the year. The owner of the property pledged has his protection in the severe penalties surely to be visited on the pawnbroker who violates his trust, and in the rule that there can be no dissolution of the company without the sanction of legal authority and a fee of one hundred dollars to have the name of the company erased from the tax list.

MONEY-LENDING COMPANIES.

In addition to pawnshops, and kindred thereto, there are what are called money-lending companies. These are of two kinds; one called interest-receiving societies and the other interest-receiving companies. The rules which govern such companies are these: First.—The society must consist of a definite number of members; each member is required to contribute an equal sum to the common fund; a meeting must be held at the end of each quarter, at which all members must be present; due notice of the meetings must be given, and they must be held at the house of the president of the club; the various sums contributed to the club are to be weighed and examined by him; and should important business or severe sickness prevent any member attending, the member is required to appoint a suitable representative.

Second.—At each properly notified meeting, the borrower must pay back an installment of his loan, with interest at the rate agreed upon; the installment to be equal to the amount contributed by each individual to the fund in the first instance; the interest to be divided equally amongst the members of the club.

Third.—Each member shall, at each of the meetings, duly and properly notified, contribute to the fund a sum equal to that which he contributed at the first meeting. In order to give each an opportunity to borrow from the collective amount thus raised, each member may deposit in the lottery box, placed on the table for that purpose, a tender written in a legible hand, setting forth the rate of interest which he is disposed to pay on the amount of money he desires; the tender is then to be taken out of the box by the president of the club; and he who is found to have made the highest offer is declared the receiver of the loan; and should two or more persons make an equal offer, he whose tender was first presented is awarded the loan.

Rule Fourth provides for a repast for the members, served either at the residence of the president or at a neighboring tavern; and the Fifth requires that each member shall be provided with a book of the minutes of each meeting, and any member failing to contribute to the general fund shall have three days’ grace; and then failing, shall pay a fixed fine every day until the sum due is paid. The highest rate of interest I have seen stated as paid for money thus borrowed is twenty-five per cent. per annum.

III.

LAND TENURE AND TAXATION IN CHINA.

SOME of the leading rules which govern the tenure of land and the succession to estates in China may be of interest in connection with what has been written on the currency and banking of the empire.

It is a fundamental principle with the Chinese Government that everything under the sun belongs to the Emperor, and that all the people are his servants; and it is upon this maxim the doctrine is founded that all land belongs to the Crown. But the doctrine is theoretical only; for, from time immemorial the arable land of China has been minutely divided among the general mass of cultivators; and if the taxes due the Government are paid, the liberty of the holder to convey the land is not interfered with. So long as the taxes are paid, the rights of the private holder are about as absolute as they are under any government, the interference of officials being the exception, not the rule. This right extends to mortgages and leases, and the terms used in contracts to sell or purchase land are the same as those employed in the sale or buying of ordinary personal property. In general, the tax on land is moderate, averaging about one-twentieth or one-thirtieth of the gross produce; and owners who do not wish to cultivate their land can lease it on terms that leave a margin in their favor after the payment of the Government dues. Taxes are collected directly by officials of the Government, and the middleman, who is regarded as indispensable in almost every other business transaction in China, has no office in the collection of taxes, no place like the zamindar class of India, or hereditary rent receiver or farmers-general of taxes; but it should be understood that the principle of collecting taxes directly by officers of the Government is more theoretical than practical, and in consequence the Government sustains large losses. The principle is sound, but, like many laws of China likewise sound and just, it is viciously executed, entailing much hardship and injustice.

TWO KINDS OF TENURE.

There are two kinds of land tenure known to Chinese law; the military and the common. But, with a people where the military class occupy the lowest social grade, military tenure has not been encouraged. The rule against alienation having been relaxed, those who held land by this tenure now sell it as land is sold by those who hold by common tenure. The military tenure was introduced after the conquest of China by the present Manchu dynasty in 1644. Large tracts of land, especially in the province of Chihli, were confiscated by the conqueror, and grants were made to the more prominent of his followers and to their heirs, without the power of alienation and without reservation of rent. The condition, if not expressed, was implied to mean or be understood as the condition of military service; but, as stated, the military tenure is fast becoming obsolete, and it may be said that ninety-nine one-hundredths of the land in China is now held by common tenure. One of the principal incidents to land held by common tenure is the payment of land tax. The full tax which, at the beginning of the present dynasty, was levied on all adult males is now virtually incorporated with the land tax, and the amount of the combined tax, during the reign of K’ang Hi, 1662-1723, was, according to decree, fixed once for all.

During the reign of this emperor, a decree was promulgated (in the year 1711) declaring that the land tax should be levied for all time in accordance with the rolls of that year, and that no extra levy should be demanded in respect to any increase of population. While this decree would, literally interpreted, be as unchangeable as the laws of the Medes and Persians were meant to be, yet the more reasonable interpretation, and the one which has been made practical, applies it to land then under cultivation, the rate of taxation on which should not be increased because the population increased; and even this pledge has been but imperfectly observed. There was then no tax on waste lands, because waste land belonged to the Government; but when such land was brought under cultivation it became, as now, liable to be assessed for taxation by the custom of the province in which it was situated. According, therefore, to the principle of the more reasonable interpretation indicated, the gross amount of land tax varies with the prosperity of the country, and when such tax has been fixed for any particular locality, there is no law to increase it.

The logical conclusion here reached has not, however, successfully baffled the diplomacy of local officials. It is doubtful if any decree of the Chinese Government with reference to revenue, however clear and positive its language, has ever succeeded in depriving local administrators of the means of avoiding it in the interest of their customary “squeeze.” In the case now under consideration, the decree is explicit, and yet officials have tacked on extra charges under various designations, such as “allowance for difference of scale, transport fee, collection fee,” and so on, until, although the amount is set forth in the title deed (which is usual), the land-owner pays about half as much again. The Central Government seldom interferes with such avoidances of its decrees; for each district is assessed in the Government revenue book for a certain amount, and when the magistrate of the district so assessed furnishes the amount, the Government is satisfied. It is more of a general rule than an exception that, in ordinary years, the districts yield a very respectable surplus, which is the private perquisite of the magistrate and his subordinates. There is no relaxation of the decree; the assessed amount must be furnished. The remission of any part is only made when a serious calamity has visited the district, destroying crops or flooding lands; and in such case the facts must be reported, stating whether the injury is permanent or temporary; as must also be reported, under heavy penalties for failure, the improvements and general property of the district; but the land tax is now better determined and less liable to influence by Imperial or local officials than any other form of taxation in China.

THE TRANSFER OF LAND.

The transfer of land in China, by sale, has some peculiarities. The transfer is invariably evidenced by a deed reciting that the seller is in want of money, and, having first offered the land to his kinsmen, who declined to buy, he has arranged, through the middleman, to sell it to the intended purchaser, at the price named in the deed, in which the land is fully described and the purchase money acknowledged. It is also provided in the deed that the purchaser shall be the sole proprietor, with the rights and privileges belonging thereto. The deed is signed by the seller and the middleman, each subscribing his own private mark or affixing his seal. The middleman is usually the friend of both the seller and purchaser, and his name is not required as a guarantee of title, but as proof of the good faith of the transaction, and that the seller is what he represents himself to be. So necessary is the middleman thought to be, that no prudent purchaser will accept a transfer in the absence of the middleman’s name. But such name on the deed is not absolutely essential to the validity of the sale, though it gives publicity to it. There are not less than two middlemen to each sale, sometimes as many as eight or ten, and these receive a commission, or are entertained, the general practice, at a feast, the expenses of which are not infrequently provided for in the deed of sale.

In China, each village has its head-man. Not infrequently the entire population of a village are of the same family, either by blood or marriage, and the village head-man is always an indispensable party to the sale of land, to the extent that his seal must be attached to the deed of sale before it can be registered at the office of the district magistrate. The price of registration is a charge the purchaser must pay, and without registration the land is subject to confiscation. Nominally, the registration fee is about three per cent. on the amount of the purchase money, but there are extra charges which increase it to five or six per cent. In order to avoid this high tax for registration, the amount of the purchase money is universally understated. Another way of avoidance is to divide the amount, the seller executing two deeds in identical terms, one of which goes to the magistrate to be stamped, and the other is retained by the purchaser as a receipt for his money. If a deed has been properly registered, it should have attached to it a piece of paper with the names of seller and purchaser, and setting forth the location of the land, the amount paid as transfer fee, and the amount of the annual land tax for which the new proprietor is responsible, and bearing the impression, in red, of the magistrate’s seal in several places, thus making the deed the highest form of title obtainable.

When a foreigner acquires land at an open port he acquires it by lease in perpetuity, and the lease is registered in the consulate of the foreigner, no fee being charged by the Chinese authorities.

LAND MORTGAGES.

The ancient form of transferring land by mortgage has more the appearance of loaning than mortgaging the land for the money, as the original owner could at any time, on repayment of the money, get back his land, the use of the land being exchanged for the use of the money, and while the latter could be demanded back, the former could not. Among a business people like the Chinese, such a form of security naturally resulted in great inconveniences, and, later, a law was passed limiting the period of redemption to thirty years. It is doubtful if there ever was a law against the alienation of land, but so tenacious were the old families about the tenure of their landed estates that alienation was looked upon as impossible, and custom gave it the sanction of law. The idea was that land was not so much the property of the occupant or owner as it was the heritage of the family or tribe of which he was a member, all of whom had a qualified interest in the reversion, subject to the life interest of the occupant. But the spirit of commerce, civilizing wherever felt, has materially modified this iron-clad custom in favor of free trade in lands, and strengthened individual against family ownership. If the land is mortgaged for money, to be repaid at a short date, it does not change hands and need not be recorded, as in the other case; but the title deeds should be deposited with the mortgage, with a memorandum of the terms of the loan. If the debt so secured is not paid at the proper time, the creditors must apply to the authorities for leave to sell; and if there should be other creditors, it is not clear whether the creditors holding the mortgage could apply the proceeds of sale first to the payment of their debt. This defect is cured by the law of nearly every other country requiring all transactions of the above description to be recorded.

THE LAW OF SUCCESSION.

The universal rule in China as to the succession of real and personal property is that it descends in equal shares to all the male children, whether born of the proper wife or concubine. The intention of the rule to exclude females from the inheritance is manifested by the right of the owner of the land to adopt a son from among his relations; and, in the event of failing to do so, the relations have a right to hold a family council and adopt one, who succeeds to the whole inheritance. There must be a complete failure of male heirs, natural or adopted, before the daughters can succeed. The succession, by operation of law, does not require to be ratified by the authorities. The rules relating to succession of landed property are substantially as follows:

“Landed property shall descend in infinity to the issue of the last holder. The male issue shall be admitted before the female. Where there are two or more male issue in equal degree of consanguinity, they shall inherit altogether equally, and in default of male issue, the females shall inherit equally. This rule applies only to land of the people generally. All lineal descendants in infinity, of any person deceased, shall represent the last purchaser. On failure of lineal descendants of the purchaser, the inheritance shall descend to his widow or widows. There being no widow living, the inheritance shall descend to the collateral relations, being of the blood of the purchaser, subject to the preceding rules. In default of the heirs above mentioned, the land shall revert to the Government; and it is the duty of the head-borough and villagers to report such cases to the local authorities, on pain of punishment as abettors in an attempt at concealment.”

T. R. Jernigan.

Authorities.—Williams’s “Middle Kingdom,” Martin’s “History of China,” “Papers of the Asiatic Society,” Eakin’s “Papers on China.”